EOFY Tax Tips for 2012/13

We are well into June with only a handful of weeks before the end of the 2013 financial year.  The following is a checklist of the more common tax planning tips for you to consider before it’s too late.


Super

Tax deductible contributions of up to $25,000 can be contributed into super in 2012/13.  Make the most of it.
Even more importantly, ensure you don’t exceed these contribution caps.
If you earn less than $46,920, consider making a contribution to qualify for the government co-contribution of up to $500.
Consider splitting contributions with your spouse if they have a lower super balance.  This could become useful in latter years.
If your over 55, consider a Transition to Retirement Strategy for next financial year!

Review Ownership Structure of Your Investments

If you have significant cash holdings, consider holding in the spouses name with the lowest marginal tax rate.  Or even better, take advantage of the non-concessional contribution limit of up to $150,000pa and contribute into your super fund, where the maximum tax rate is 15%.  You can still hold in cash or a term deposit, but in a much more tax effective way.

Prepay Investment Expenses 

If you have an investment loan, for example an investment property or share portfolio, you can prepay next year’s interest.

Manage Capital Gains

If you have a capital gain in this financial year, consider selling a non-performing asset to offset the gain with a loss.  If you are considering selling an asset which will result in a capital gain, if possible wait until July, and defer tax for another year.

Prepay Income Protection

Income protection premiums are tax deductible so look to pay annually.

Term Deposits

It’s a bit late now but in future, try to have term deposits maturing post June 30

It is very important you get advice from your accountant or financial adviser before taking any action as your personal circumstances need to be considered and the above checklist is not exhaustive. Generally speaking, it is usually to your advantage to bring forward tax deductions and get the benefit now.  Good luck!



Aaron McCracken
Head of Advice